SAUDI ARABIA: Saudi Arabia calls on major consumer nations to lower taxes on refined products, control speculation by oil traders on international oil markets

Record ID: 189433

  • Title: SAUDI ARABIA: Saudi Arabia calls on major consumer nations to lower taxes on refined products, control speculation by oil traders on international oil markets
  • Date: 23rd November 2005
  • Summary: BRITISH CHANCELLOR OF THE EXCHEQUER GORDON BROWN WALKING TOWARDS IEF HEADQUARTERS AND ENTERING
  • Embargoed: 8th December 2005 12:00
  • Keywords:
  • Location: Saudi Arabia
  • Country: Saudi Arabia
  • Topics: International Relations
  • Reuters ID: LVA7UT3J66UVGYUU9ODGUGETWMVJ
  • Story Text: Saudi Arabia's King Abdullah bin Abdul Aziz called on major consumer nations to lower taxes on refined products, and to control speculation by oil traders on international oil markets.
    He said that measures by producing countries to stabilize markets and prevent price volatility would not work if major consumer countries do not cooperate.
    "All the efforts made by producing countries (to moderate prices and balance markets) will not bear fruit if the consumer countries do not reciprocate with positive stances that entail reducing speculation on the oil markets and resisting false rumours and information that distorts market facts," King Abdullah bin Abdul Aziz said at a ceremony to inaugurate the headquarters of the International Energy Forum - a body dedicated to enhancing dialogue and an exchange of information between major oil producers and consumers - in the Saudi capital, Riyadh.
    "These countries must also reduce the burden on their citizens by lowering taxes on refined products if oil prices rise," added the Saudi monarch.
    Saudi Arabia's oil minister Ali Naimi asked consuming nations for a "road map" of future oil demand in response to repeated calls for Riyadh to ramp up its production capacity and curb record prices.
    Speaking after a day of talks between global consumer and producer nations following the opening of the IEF headquarters, Naimi said it was difficult for producers to invest in new oil production capacity without knowing what the demand for it would be.
    "The response of producing countries to that request (by consuming countries to provide information on plans to expand production capacity) is to seek from consumer countries a road map for demand, because we as producers do not want to built installations that are not matches by demand," said Naimi.
    "We know about the stated goals of consumer countries to use many alternatives to oil to conserve energy and to increase the efficiency of cars. Our question to them is: All of this is good, but we want to see how it will affect future demand, so that we do not build installations without the demand to match them," he added.
    Naimi's comments turn the tables on Western nations who have called for greater transparency from oil producers and higher output to rein in prices, which hit a record 70 U.S. dollars a barrel in August. They have since fallen to about 56 U.S. dollars.
    Finance ministers from France and Britain attended Saturday's talks to drive home the call from the G7 group of industrialised nations to get more oil onto the markets.
    The Saudi oil minister said that oil markets are "comfortable" and that crude oil supply exceeds demand. The problem, he said, was that refineries were unable to refine enough crude oil to meet consumer demand for refined products.
    "Is there any need to take extra measures (increase crude oil production) to those already taken? I do not think so. If you recall, at last September's meeting, OPEC offered consumer countries a market increase of 2 million barrels per day, but there was no demand for it. There are many reasons for this, but the supply/demand situation is such that (crude oil) supply exceeds demand, but refineries around the world are unable to meet the needs of consumers," said Naimi.
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